Analysts Predict March Inflation to Drop to 16.52%
By Modupe Gbadeyanka
Analysts at FSDH Research have predicted a fall in the March 2017 inflation rate (year-on-year) to 16.52 percent from 17.78 percent recorded in the month of February 2017.
In its Inflation Watch released on Thursday, FSDH Research noted that this is premised on the slower increases in the food and non-food divisions than previous months coupled with the base effect of the higher prices in the CCPI in March 2016 than the current month.
Analysts at the firm pointed out that the monthly Food Price Index (FPI) released by the Food and Agriculture Organization (FAO) shows that the Index averaged 171 points, 2.75 percent lower than the revised value for February 2017, but 13.39 percent higher than the March 2016 figure.
According to the FAO, the drop in the value of the Index was mainly attributable to the sharp decline in the prices of sugar and vegetable oils.
The FAO Sugar Price Index fell by 10.89 percent in March 2017 on the heels of reports on improved supply conditions in the main sugar producing region of Brazil.
Also, the FAO Vegetable Oil Price Index was down by 6.18 percent as a result of abundant exports of soy and palm oil in Southeast Asia, Indonesia and South America coupled with a favourable outlook for global supply in 2017/18.
The FAO Dairy Index declined by 2.27 percent majorly due to the fall in milk powder and cheese. Butter prices on the other hand, rose amid reduced exports.
The FAO Cereal Price Index decreased by 1.81 percent as a result of the fall in the prices of wheat, maize and rice. Good production prospects and sufficient supplies weighed on the prices.
On the other side, the FAO Meat Price Index was up by 0.74 percent as prices of bovine and pig meat increased due to firm import demand particularly from China.
The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of March 2017 on April 15, 2017.